Last week the National Telecommunications and Information Administration (NTIA) announced an extension of its contract with Verisign to run the .com registry, which includes repealing Obama-era price controls and allows for increases of up to 7% in the prices .com registry fee in each of the last 4 of the 6-year term of the Registry Agreement. But the Internet Commerce Association says these increases are unjustified.
The ICA says:
the fee cap currently in place was put there for good reason: because there was no justification for any increase and because the public needed protection from excessive fees. Higher fees for Verisign are not justified, as demonstrated by considering these four key points:
- Verisign is a provider of technical registry services, it does not own the .com name space;
- Unlike Verisign’s fees, the prices set by registrars and domain name investors are held in check by competition;
- Verisign is already well-paid for its services, as evidenced by its substantial profits; and
- ICANN need not approve fee hikes; on the contrary ICANN ought to assert its right to set reasonable fee levels for its hired registry manager.
Expanding on its point in the post, ICA’s Zak Muscovitch writes that Verisign is not the owner of .com, ICANN is, and its role is “is comparable to that of a land registry manager” allowing it to a fee for its service and that fees to operate .com “should be exclusively made by the owner of the name space” which is ICANN.
On fees, the ICA accepts that Verisign is entitled to a fee to run .com with estimates ranging from $1.00 to $3.50 per domain name to run the registry. Currently Verisign charges $7.85 per domain and “if the proposed fee increases go into effect, by the end of the six-year agreement term, the fee for each .com domain name will increase to $10.29 per year, a 30% jump from current levels.”
The ICA also notes that businesses using .com domain names have little choice but to pay the increases.
According to the ICA:
If a business that is already established on its .com domain name is unhappy with the higher renewal fees, moving to a different domain name would be highly disruptive and expensive, if not entirely impractical. All of the prior advertising promoting a business' .com domain name, all the existing links, and all its email addresses, would need to be changed. All the goodwill that a company had developed around its .com brand would be lost. Verisign, therefore, benefits from having a substantially “captive audience” that is generally forced to absorb any and all fee increases which Verisign decides to impose. Accordingly, there should be no consideration of any increase in .com registry management fees in the absence of clear and compelling justification for raising them on a substantially captive market.
And finally, “the .com extension offers unique benefits, and those desiring those benefits can only obtain them by selecting a .com domain name. Furthermore, the large installed base of .com websites has little choice but to pay whatever fee is charged to renew their domain names, regardless of whether that fee has any bearing on the actual costs incurred by Verisign in running the .com registry.”
To read the full post, and a refutation of a Verisign blog post that was critical of domain name investors, or domainers that suggested some of their businesses are questionable, see: